Publisher: Boston University School of Management, Research Paper No. 2012-29

Date Published: October 2012

For decades, marketers have used consumer feedback when creating ads — by holding contests to determine a new slogan, for example, or including customer testimonials. But in recent years, many companies have gone a step further and have used ads produced by consumers. Individuals, after all, now have the access to multimedia software, the Internet, and social media networks necessary to produce and disseminate brand videos.

Companies including Amazon, Converse, General Mills, Google, Heinz, Microsoft, NBC, Nike, Procter & Gamble, and Unilever have featured consumer-made ads in campaigns. PepsiCo’s Frito-Lay has run highly popular commercials made by its customers during six Super Bowls.

Proponents argue that these ads cut through the clutter with authentic consumer-to-consumer messages (which are also produced at a much lower cost than professional videos), and the results have been largely encouraging. During the past four years, consumer-generated ads have consistently gotten the best ratings in the Kellogg School of Management Super Bowl Advertising Review. They have also ranked number one on USA Today’s Ad Meter, and generated the most buzz for brands, according to a 2012 Nielsen study.

But there have been some high-profile backfires, exposing brands to parody campaigns or subversive attacks. A prime example: To publicize its Tahoe SUV in 2006, Chevrolet created an ad-making tool that a number of anti-SUV consumers used to post negative commercials on the Chevy website.

Little research has been done on the effectiveness of consumer-generated ads, so the authors of this paper used several experiments and surveys to explore whether they offer real advantages over traditional, company-led marketing efforts. Their findings “unanimously favored” consumer-made ads, report the authors, who say these ads are far more persuasive — and more likely to affect brand loyalty and purchasing intentions — than the standard type.

In the first step of the study, the authors analyzed comments on YouTube about eight consumer-generated ads that were widely labeled as successful in the media. Originally produced as entries in company-sponsored contests, the ads were for different products (cars, personal care, and snack food) and employed different strategies (informational, humorous, or image-driven). Creator biographies were linked to each ad.

After performing a textual analysis of YouTube users’ comments about the commercials, the authors identified four themes driving their effectiveness: trustworthiness, identification with the ad creator, how well the ad was perceived to be executed, and whether the viewer was engaged.

In the second phase of the study, 233 people, ranging from 25 to 55 years old, completed an online survey about a new advertisement for the Amazon Kindle — chosen because of its appeal to many demographic groups. A consumer had created the advertisement in a competition run by Amazon.

Some participants in the study were told that an advertising agency had created the ad. Others were told that a consumer had created it because she loved the Kindle. Still others were told that a consumer had made the ad in response to Amazon’s offer of a US$20,000 prize for the best customer-produced commercial. The participants were also given a short profile of either the consumer or the advertising agency before viewing the ad and completing the survey.

Respondents who were told that a consumer had created the commercial judged it to be more authentic and trustworthy than did those who thought it had been made by an ad agency. This was true regardless of the consumer’s announced motives for making the ad — financial gain or love of the product. In addition, viewers in the two consumer groups were significantly more likely to say they intended to purchase a Kindle than were viewers who thought the ad came from an agency.

Extending the findings, further experiments showed that people hold consumer- and company-created ads to fundamentally different standards. Survey participants expected company-produced ads to be executed at a higher quality and have a “professional” look, whereas artistic originality and authenticity were deemed to be more important factors for ads made by consumers.

The authors argue that their study shows that consumer-generated ads engage viewers more than agency-crafted commercials on four levels: cognitive, emotional, personal, and behavioral.

As this form of advertising evolves, the authors write, more attention must be paid to how it is managed. For one thing, marketing executives should carefully consider how consumer-generated ads are chosen for company-sponsored distribution. If ads are created through a contest, for example, is it better for the brand’s image to use an expert panel or have consumers vote to decide the winner? And companies must also decide how much control they want, if any, over the creation of the ads. Some firms explicitly encourage people to create ads for their products, whereas others merely disseminate positive ads that pop up online.

The authors do sound a note of caution, however. Because consumer-generated ads are valued for their personal and emotional resonance, an overreliance on this type of marketing could eventually rob them of their inherent value.

If consumer-generated ads “proliferate such that high quality company-sponsored ads by pseudo-professionals” become the norm, the authors write, “expectations of [their] quality should rise in kind, negating the benefits of evaluation against lowered standards. Trust and authenticity could also weaken as the line between ‘real people’ and advertising agencies blurs.”

Bottom Line:
Commercials made by consumers about a company’s products are more effective than those created by the company itself, leading to higher levels of brand loyalty and purchase intentions among viewers. Consumer-generated ads have more emotional and personal appeal, and are deemed to be more credible and authentic, than those coming from the company.

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